Employee unions of four state-owned non-life insurers have called for a merger of all these companies and form a single general insurance behemoth to strengthen their market share and become more profitable.
At present, there are four state-owned non-life insurance companies — New India Assurance (Mumbai), National Insurance (Kolkata), United India Insurance (Chennai) and Oriental Insurance (New Delhi). All these four companies have a cumulative asset base of Rs 1,02,000 crore, reserves of Rs 15,000 crore and capital of Rs 550 crore.
The demand was made at a meeting of a delegation of Bharatiya Vima Kamgar Sena (BVKS), the umbrella body representing the unions from all these four insurers, which had called on Finance Minister Arun Jaitley in New Delhi earlier this month.
The delegation, which met the Finance Minister on August 6 to oppose the 49% FDI proposal, was led by two Shiv Sena MPs Anilbhau Desai and Sanjay Raut from Mumbai.
“During our meeting with the minister and financial services secretary GS Sandhu, we demanded merger of all the four PSU non-life players to form a monolithic corporation, which shall strengthen our market share and help us serve rural and social sectors better,” New India Assurance union president Sharad Jadhav told PTI.
Currently, the four state-run general insurers have a combined market share of a little more than 55%, while the 20 private players control the remaining space.
These PSUs are currently competing mostly against each others by cutting premium rates, which has affected both their market share and profitability apart from providing advantage to private players.